Key Takeaways
- It takes an average of two years to turn a behavior into a permanent habit.
- Your money habits during the first few years of retirement are especially important in setting the tone for the rest of your retirement.
- Be intentional in setting good habits from the start.
You’re probably well aware that car insurance rates for young people are very high. This isn’t surprising, given that they’re inexperienced and more likely to get into accidents. They may be able to drive a car, but there’s a difference between that and really knowing how to drive a car. They have to think about split-second decisions, whereas an experienced driver does so automatically.
As it happens, it takes about two years to really learn something well and turn behaviors into permanent habits. In line with this idea is a recent MarketWatch.com article, which addresses how the first few years of retirement spending will set the tone for the rest of your retirement. In essence, it’s critical to build new skills during the first two years of your retirement. Even if you’re decades away from retirement, and it seems far off on the horizon, it’s good to keep this in the back of your mind, so that it’s not a shock to you when you do retire.
So why is it critical to build these new skills? Because before retirement, you had a set of money habits that may not work within your retirement framework. You’ll need to be intentional about the habits you want to set, as they’ll be your habits for the rest of your life. The more you practice these skills, the more ingrained they’ll become.
If you’re sticking with a nice, safe 3% – 4% withdrawal rate, still doing the things you want to do, being intentional about your decisions and daily behaviors, and you stick to that for the first two years, you’ll find that it’ll become automatic. So wouldn’t it be good to get that right from the get-go, and set yourself up for the decades to come? Something to think about for the future. Until next time, enjoy.